Using my IRA to find a rehab

[Jason Hatfield]

All,

I have a subject to deal locked up and I'm trying to figure out the best way to fund the $20K rehab.

I have an IRA that was rolled over from my previous employers 401K with a balance of about $17K. I also have a 401K with my current employer worth $22K that I can borrow against. Their max loan is 50% meaning I can get $11K putting me half way there.

The question is how do I tap into the IRA without it being a withdrawal subject to the taxes and penalties? I asked my investment broker and he claimed he was not aware of any options.

Thanks

[Matt Devincenzo]

Originally posted by @Shawn McCormick:

This is a fairly common topic at my REI club meetings and there is one that is a corporate sponsor of the meeting and a lot of members are doing this. What was suggested to us is that you find a joint venture partner who also flips houses and you can fund each others project for the same amount, that way, both of you are vested for equal amounts. Just be sure to include each other as a beneficial interest in each others properties.

I am a newbie, but I think I'm pretty accurate here. Good luck!

 FYI I forget the "legal term", but what you have just outlined is still considered a prohibited transaction. Making "deals" or "arrangements" like this to circumvent the rules can have serious consequences. 

@Dmitriy Fomichenko may be able to help with the correct term.